In a letter to the market published by IVASS yesterday, the Italian insurance regulator expressly clarified that the scope of application of the guidelines set out in a previous letter to the market also includes EU insurance undertakings acting in Italy under both the right of establishment and freedom of services regimes.By the letter to the market addressed to Italian insurance undertakings on 14 March 2018 IVASS invited insurers to review the wording of their policies according to certain guidelines agreed between ANIA (the Italian Insurance Association) IVASS and the most important consumers' associations with the goal to simplify them for customers. In light of the above IVASS requests that the review of the policy wording – if necessary, also taking into account the proportionality principle – shall be carried out:
(i) at the latest by 1 of January 2019 for new products and
The intervention of the insurers' and consumers' associations as reflected in IVASS letter to the market is focused on the following main aspects:
– the distinction between general and special conditions should be eliminated: the contract should be divided into different sections and where necessary into chapters;
– contractual conditions must be clear and transparent so that there is correspondence between the heading and the content of the article; it is recommended also to use simplified and actually intelligible wording as well as explanatory and consultation boxes to introduce a form of communication which is closer to the level of knowledge of the average customer;
– in the event where contractual amendments are introduced, it is advisable not to include appendixes but rather to provide a new policy certificate;
– the policy certificate should contain specific data, such as the data of the contracting party, of the insured and the beneficiary, as well as main and optional guarantees;
– a presentation page would be useful, if laid down in a simple way, to anticipate to the client the content of the contract; however, in order to simplify the reading and to limit multiple documents, the policy certificate and the presentation page may be merged into a sole document, provided that the presentation page is optional;
– all the contractual provisions related to the genetic, functional and conclusive phases of the contractual relationship should be included in the first section of the contract or, where they merely reproduce provisions of the law, in a separate annex;
– the subject of the contract should be included in a specific section for each guarantee and must be set out in a clear and transparent manner (including profiles related to the term, territorial extension of the guarantee and the premium) using common and easily comprehensible terms. For this purpose IVASS suggests various options that may be adopted by insurers and pointed out that in the framework of the activities provided under the IDD (reference is made to the Product Oversight Government) which includes among others the product testing and the monitoring of the products, insurance undertakings will assess if the solution concretely adopted is appropriate to achieve the objective of simplification and clarity;
– the criteria for the assessment of damages provided to determine the indemnity should be more transparent and indicated in a clear, unambiguous and objective manner.
The letter to the market extends to EU insurance undertakings also the obligation to communicate to IVASS on a quarterly basis the revised products until the end of the revision process, in order to allow it to give evidence thereof on its website.